Originally Posted By: FutureDoc
Originally Posted By: JTK
Nor would I. They're great looking, feeling and driving vehicles IMO. You certainly don't see wide spread issues with them and their sales floors are always bustling. What I don't like about them is what they cost new. They're almost Toyota, Honda, Subaru, Mazda, etc.. range. For me, it's tough not to go where the resale value is.
Resale only works when the car you have is highly valued and the car you want is really heavily discounted. Otherwise, you constantly trade-in for the same high-value car, then you will never really see that resale bump. Now, if you trade from a low-value car to an in-demand car, ouch!
Let us take Subaru vs Hyundai. I was in that position as my 1 & 2 choice was between Subaru (WRX) and Hyundai (GenCoupe).
Subarus are selling. A $30K Subier night sell for its MSRP or darn near it. I know my Subie dealers are greedy right now. Lets just say you talked a Subie down a $1000 OTD.
Compare that with a Hyundai dealer with a $30K MSRP vehicles that is slower to sell. I talked my dealer down $4500 OTD on my Ginny with a few dealer 'installed' freebies (trunk mat, first aid kit).
Ok, lets do the math!
- A $30k WRX with $1K discount will keep 51% of its MSRP value over 5 years. So, you lose $14K over 4 years in the Subie. This is one of the best resale car values too!
- A 30k Gen Coupe with a $4,500 discount will only keep 36% of its MSRP value (ouch)... but you didnt get it for MSRP. You got it for $25,500 and now it is worth $11K... so you lost $14,500!
So there is $500 in difference! That only applies if you pay cash. (and taxes/insurance will slightly skew it towards the Hyundai's favor over time)
But wait, there is more!!!!!
Finance Charges. You will pay $2200 over 5 years (@2.9%) on a $29,000 loan compared to $1,900 for the 25,500 option. Thus that resale difference if you completely borrow the full amount is about $200 and that will cover the tax. Now, Hyundai will give me $500-1,000 in bonus cash as a owner, etc.
Now, what is this *perk* of resale you speak of?
Holding their resale value normally pays off when vehicles are 10/15yo+ vehicles. So a 2002/2005 junker bought for $5,000 with 150,000 miles are driven a few years and sold at 200K miles for $5,000 is where the "resale is at. Normally these are real utility vehicles, trucks and other things doing the real "work". Most CUVs/Sedans will not be like this. They will fall to $500-$1500 and remain until the junk yard.
Good post. Puts the "resale" myth to rest. BTW-your right...Subaru is selling all the vehicles they make these days-not much reason for the dealers to do you any favors.